A resident walks through the grounds of the Park Merced neighborhood in San Francisco, Calif., on Thursday, June 10, 2010. Owners of the sprawling complex of houses and high-rise apartment buildings plan to proceed with a $1.2 billion renovation project despite defaulting on their mortgage.

Photo: Paul Chinn, The Chronicle

A resident walks through the grounds of the Park Merced...

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A bicyclist and skateboarder make their way through Parkmerced on Monday, January 31, 2011 in San Francisco, Calif.

Photo: Lea Suzuki, The Chronicle

A bicyclist and skateboarder make their way through Parkmerced on...

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The Park Merced neighborhood is seen in San Francisco, Calif., on Thursday, June 10, 2010. Owners of the sprawling complex of houses and high-rise apartment buildings plan to proceed with a $1.2 billion renovation project despite defaulting on their mortgage.

Photo: Paul Chinn, The Chronicle

The Park Merced neighborhood is seen in San Francisco, Calif., on...

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Apartment buildings are seen at the Park Merced neighborhood in San Francisco, Calif., on Thursday, June 10, 2010. Owners of the sprawling complex of houses and high-rise buildings plan to proceed with a $1.2 billion renovation project despite defaulting on their mortgage.

Photo: Paul Chinn, The Chronicle

Apartment buildings are seen at the Park Merced neighborhood in San...

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San Francisco State University student Edith Del Pezo checks her phone as she walks through Parkmerced on her way to class on Monday, January 31, 2011 in San Francisco, Calif.

The San Francisco Board of Supervisors gave the go-ahead Tuesday to a $1.2 billion plan to transform the sprawling Parkmerced area from a car-centric neighborhood to a state-of-the-art sustainable neighborhood.

In a 6-5 split, the board voted to replace 1,500 rent-controlled town homes with 7,200 new energy-efficient units over the next 20 to 30 years.

When the project, which currently houses about 8,000 residents, is completed in 2040, an additional 14,000 people will be living in the 152-acre neighborhood, originally built in the 1940s as a suburban outpost in San Francisco. Units where rents are currently controlled will stay that way, but new ones will be rented or sold at market rate. The rebuilt Parkmerced will have a maximum of 3,200 rent-controlled units, the same number it has today.

The new neighborhood will have a school, easy access to transit, and stores within walking distance of homes designed to save water and power, a dramatic change from the expansive lawns and wide streets now found in Parkmerced. All existing garden apartments will be demolished, while the 11 landmark towers will remain.

The vote followed loose ideological lines, with progressive Supervisors David Campos, John Avalos, Ross Mirkarimi and Eric Mar opposing the project. Supervisor Jane Kim also voted against the plan, which, following standard procedure, will be up for what's expected to be routine final approval in two weeks.

"Today is a big day for the city of San Francisco and for the region," he said before the vote. "This is a regional project."

Some residents and tenant groups vociferously opposed the project, arguing that it is a modern-day land grab by a developer hoping to evict tenants and eliminate rent control at the complex.

They promised to fight the board's approval of the project in court or at the ballot box, using the city's voter-initiative process to overturn the board's decision.

"I think it is wrong to demolish 1,538 people's homes," said Mitchell Omerberg, a tenant activist. "Every time we've done that in this city, we've regretted it."

Protecting renters

Some supervisors worried that the development agreement, which outlines rent-control guarantees and the details of the project, isn't strong enough to protect renters, despite assurances from the city that it is.

"There are times when going as far as possible is simply not enough, because the law is in such a state that there is still a degree of uncertainty," Campos said.

Hoping to make the agreement stronger, Supervisor David Chiu introduced 14 pages of amendments Tuesday morning that, among other things, give tenants the right to sue if the developer reneges on promises and guaranteed money if rent control is eliminated.

PJ Johnston, spokesman for the developer, said supervisors had no reason to think the developers will not keep their promises.

"We're very heartened by the wisdom and courage of the supervisors who voted for the project," he said in a statement. "We're also mindful of the legitimate concerns of those who voted against it. We intend to live up to the best intentions of all 11 supervisors and to continue to earn the trust of our residents."

But Parkmerced residents at the hearing said they have no faith that the developer or the city has their best interests at heart.

"I think this is a travesty," said Michael Russom, a Parkmerced resident. "There's no guarantee that we're protected."

Early in the meeting, Cathy Lentz, a resident of Parkmerced, had to be dragged out of the board chambers by sheriff's deputies after she began yelling at supervisors.

As three deputies held her outside of the meeting room, her eyes filled with tears.

"I've lived there 50 years," she wailed. "What are they doing?"

Lentz, 60, was escorted out of the building and not arrested, said Eileen Hirst, a Sheriff's Department spokeswoman.

Consider the what-ifs

Elsbernd said that while he appreciated the concerns of Parkmerced residents, they weren't considering what would happen if the project was not approved and the 1940s-era development continued to slip into disrepair.

"We talk about what the risk is to the tenants if the project moves forward," he said. "What about the risks to the tenants if the project does not?"

Rents could increase to fund maintenance and residents could be evicted so chunks of the land could be turned into student housing for neighboring San Francisco State University, he said. While the current proposal requires some upheaval, it is better than doing nothing, he said.

Craig Hartman, an architect with Skidmore, Owings and Merrill who designed the new Parkmerced neighborhood, said many other cities would model their new developments after Parkmerced.

"What I really hope for is a neighborhood that will be really, truly of San Francisco," he said. "It is an example of what can be done to make new, intelligent forms of human settlement."